Update: We have now added in-depth analysis and information about the tenancy deposit changes introduced by the Deregulation Act 2015.
The Deregulation Bill received Royal Assent yesterday 26 March 2015 which means the provisions relating to tenancy deposit schemes are now in force.
We await the final version of what will be the Deregulation Act 2015 when it is published but if we assume the provisions contained in the Bill have been carried forward with minimal change then the following will now be in place. To clarify, we have still not seen the final version that was passed by the House of Lords and so the Act could be slightly different to that shown and we will be writing a more detailed article when we see the final version.
It is likely the following now applies:
- To get rid of the problem caused by Superstrike where a deposit has been received prior to 6 April 2007 AND went statutory periodic ON OR AFTER 6 April 2007, the deposit must be protected and prescribed information given within 90 days starting from 26 March 2015. If this is done, it will be treated as though it has always been done.
- Where a deposit has been received before 6 April 2007 AND the tenancy went periodic BEFORE 6 April 2007, before any section 21 notice can be served, the deposit must be protected and prescribed information given or the deposit returned in full to the tenant. There will be no penalty for any late protection. This confirms the Court of Appeal decision Charalambous & Anor v Maureen Rosairie NG & Anor
- Where a deposit in relation to an assured shorthold tenancy has been perfectly protected, perfect prescribed information given within the correct timescales and that tenancy either goes statutory periodic or a renewal is given by the same landlord to the same tenants for the same property as the original, the prescribed information will be treated as having been given at each periodic or renewal so there will be no need for a landlord to re-issue all the paperwork again. This provision is backdated to 2007 so all landlords and agents who correctly protected and gave correct prescribed information at the beginning of the tenancy are deemed to have complied since the introduction of the legislation.
- There was a question over whose details should be placed on the prescribed information – landlord or agent. The position is now clarified and it can be either person shown on the prescribed information.
I know we have said this already but this is all subject to seeing the final Act when published.
With regards ‘pre – pre’ deposits as you call them : where a landlord serves a Sec 21 because (for instance) he needs to sell up, the tenant could potentially deny receiving the deposit back in order to remain in the property. If they are determined to stay put (for whatever reason), & refuse to sign some form of receipt for returned deposit – what then ?!
Please see this article which offers advice about returning the deposit to the tenant and avoiding the problems you suggest.
Thanks guildy. So to summarise, best course of action is to return deposit in the form of a postal order or bankers draft ? My tenants all pay by standing order – what about bank transfer method ? If this is OK, will copy of my bank statement provide sufficient proof that deposit has been returned ?
To clarify, where the deposit is a pre pre deposit, the rules will allow you to protect the deposit at any time before you serve the section 21 notice. The rules are basically saying on these deposits no penalty will be payable despite it being late. Therefore, there is no need to return the deposit in these cases.
However, if you want to return the deposit, your suggestion will be fine because you can show it went from your bank into theirs.
Also have in mind all this is only necessary if you wanted to serve a section 21 on this type of deposit. If you never want to seek possession then you can just leave things as they are.
Ahh.. thanks for the clarification. I mis-read some of the legal stuff & was under the impression putting the deposit in a protection plan at this stage could still result in a ‘penalty’ notice if or when I have to give notice (I have a few ‘interest only’ mortgages which will fall due in a few years time, which will necessitate selling the properties, hence my concerns about these changes) !
No problem. Just make sure you’ve not got any Superstrike type deposits (where deposit received before 6 April 2007 but went statutory periodic after) as those must be protected within 90 days (89 days now!) Otherwise, your fine.
When do you think this will be confirmed, I have several pre 2007 tenancies
Chris
Hello
The tenancy deposit provisions are now in. See this article for full details of the final version.
You should have had an email notifying you of this so it might be worth checking your profile and that you are subscribed to receive emails just in case there is some problem at our end.
Many thanks
Adrian